Buying our own house is a cherished dream for all of us. However, many people face the dilemma while approaching banks as they are unsure of their eligibility. This is especially true for individuals who have recently started working or have no prior experience with the home loan application process.
If you have previously been rejected for lack of eligibility or any other reason, here is a guide to help you boost your eligibility and maximize your chances of securing a house loan.
Tips to Help You Improve Your Home Loan Eligibility
There are different ways to improve home loan eligibility for a salaried individual. Some of these strategies are listed below.
Take a Joint Loan
Applying for a joint loan is one way to improve your eligibility. This step is beneficial if the other co-applicant is a family member who works and has a good credit score. The other person could be your spouse or some other close relative. Besides that, most banks grant a more significant loan amount if a female is added as a joint loan applicant. You may also qualify for stamp duty exemption if you include your wife as a co-applicant.
This strategy increases your chances of getting a loan. Additionally, if you and your wife can split the repayment EMI, you are eligible for tax relief. However, ensure you have all the home loan documents required for a salaried person when applying.
Go for Affordable Housing
If you are a first-time house buyer, you should check your eligibility under the PMAY affordable housing for all schemes. In this manner, you will not only save money on interest, but you will also enhance your chances of getting the loan.
Additionally, under-construction properties are a more cost-effective option. Therefore, if you apply for a house loan for such a property, you have a better chance of getting your loan approved.
Improve Your Credit Score
Before extending loans to applicants, banks use income and credit score assessment as the primary factors. However, there are several methods to increase your credit score, including:
- First, clear all your outstanding debts.
- Second, always pay your EMI s and dues on your credit card.
- Third, do not change your job frequently.
- Finally, do not apply for multiple credit products.
Additionally, check your credit report periodically and if there is any irregularity, dispute the claim and avoid applying for a home loan till the dispute is resolved.
Mention All Sources of Income
One primary metric for obtaining a home loan has enough income to service the debt comfortably. A salaried person might include any supplementary income source while applying for the loan. This could involve rental income, business income, and so on. You might also increase your downpayment to qualify for a loan. For example, if you own other property, you can apply for a loan against commercial property and utilize the proceeds to raise your down payment. This will increase your chances of being approved by a bank.
Opt For Longer Tenure
A more extended repayment schedule is another solution for increasing your home loan eligibility. This is because when your tenure gets longer, your EMI decreases, and you are in a better financial position to pay the installments on time. Your bank sees this as a lower risk, and your eligibility improves. However, before applying, you must correctly complete the application form and submit the home loan documents required for a salaried person along with it.
Taking out a home loan is a significant financial decision for everyone. However, if you are unsure about your eligibility, the above procedures can help you improve your eligibility and acquire a house loan swiftly.